PANews June 4 news, according to The Block report, Bitwise Chief Investment Officer Matt Hougan suggested that investors rethink the role of Bitcoin in traditional portfolios. He pointed out that although Bitcoin is highly volatile (3-4 times that of the S&P 500), its low correlation with stocks and bonds allows for the inclusion of 5% Bitcoin in a traditional 60/40 stock-bond portfolio (from 2017 to 2024), which can increase total returns from 107% to 207%, while volatility only slightly increases from 11.3% to 12.5%. Hougan emphasized that Bitcoin should not be isolated in allocation, but rather adjusted in conjunction with the overall risk budget— for example, increasing the allocation of 5% Bitcoin while simultaneously adding 5% short-term government bonds can theoretically reduce equity risk. Historical data shows that a portfolio with a 40% equity ratio, 50% bonds, and 10% Bitcoin allocation can achieve higher returns with lower risk. However, he also cautioned that early returns of Bitcoin may not be sustainable and future performance could differ.
